Watch stocks you care about

The last six years have been terrible for Nintendo's (NASDAQOTH: NTDOY) shareholders. After peaking in 2007 with a market cap near $85 billion, Nintendo has steadily collapsed and has now lost over 76% of its value over the last five years.

Unfortunately, this could be the beginning of the end for the once iconic video game company. Apple's (NASDAQ: AAPL) coming entrance into the video game market, a fairly likely possibility, could signal the end of Nintendo.

Nintendo's business model is becoming obsoleteIronically enough, Apple and Nintendo have similar business philosophies. Both believe in marrying hardware with software, and maintaining strong control over their devices. Consumers buy Apple devices to get access to their operating systems (iOS, Mac OS); likewise, gamers buy Nintendo's consoles to play Nintendo's games.

But because Nintendo is strictly a gaming company, it is increasingly unable to compete with its more diversified rivals. Nintendo's latest console, the Wii U, is underpowered compared to the upcoming PlayStation 4 and Xbox One. At the same time, Nintendo's online services -- an increasingly important part of the modern video game experience -- have been widely criticized.

While Sony pushes into streaming games and Microsoft bets on the power of the cloud, Nintendo's latest console looks almost like a relic of a foregone era. Is it any wonder that sales of the Wii U have been so poor? From April through June, Nintendo sold just 160,000 Wii Us -- less than the 210,000 the original, 7-year old Wii sold.

Nintendo's savior has been its handheld, the 3DS. Since May, the 3DS has outsold all other video game consoles in the US, and has been one of the top selling consoles in the world. In addition to the console itself, 3DS game sales have also been strong.

Apple is moving into video gamesNevertheless, Nintendo's future looks to be dire. While many might be inclined to see Sony and Microsoft as dooming Nintendo, Apple stands as a far more menacing threat.

For a while now, Apple has been making gaming a more prominent focus of its iOS efforts. Strategically, this makes sense: According to a Business Insider study, 43% of the time people are on mobile devices, they're playing games. When it introduced the iPad 3, Apple dedicated an entire portion of its presentation to the gaming capabilities of the tablet. But as any gamer knows, touch screens are far from ideal -- without buttons and joysticks, games are limited in their complexity.

Enter iOS 7. The next update to Apple's mobile operating system, set to be released this fall, includes support for third-party controllers. An iOS device, combined with a controller, would make a formidable hand-held gaming console. But Apple's efforts could even extend to the living room. Apple executives, including Steve Jobs and current CEO Tim Cook, have hinted quite strongly that Apple is planning to release a television set. Piper Jaffray analyst Gene Munster believes consumers will be able to buy Apple's TV sometime in 2014.

A TV with iOS and controller support could wreck havoc on the existing video game industry, at least according to one of the creators of original Xbox, Nat Brown. Apple's iTunes open model software makes the process of creating and publishing games easy for developers, and bringing that model to the living room could be a tremendous success.

The importance of the casual gamerWhile Brown believes that Apple could threaten the entire video game establishment, Nintendo in particular would be exposed. In general, Nintendo's games tend to appeal to a more casual audience, the sorts of gamers that would be inclined to play on an Apple TV.

Some of the most popular games for the Wii -- Wii Sports, Wii Play, Wii Fit -- were simplistic games that appealed to a casual, non-core audience. More competitive online games like Madden and Call of Duty did not sell many copies on the Wii.

Avoid NintendoSince its peak in 2007, Nintendo's management has executed poorly. Compared to the Wii, the Wii U has been a tremendous failure, and sales of Nintendo's console should not be expected to improve, as competition is only set to intensify.

The biggest threat could come from Apple, a company that has shown interest in getting into gaming. iOS is already a major gaming platform, and Apple could expand that dominance. Apple's decision to add controller support to iOS 7, coupled with a widely expected television set, could make the Cupertino tech giant a formidable foe, particularly to Nintendo, a company that continues to rely on both casual gamers and the handheld market -- one area where Apple would excel.

For now, investors should avoid Nintendo.

The tech world has been thrown into chaos as the biggest titans invade one another's turf. At stake is the future of a trillion-dollar revolution: mobile. To find out which of these giants is set to dominate the next decade, we've created a free report called "Who Will Win the War Between the 5 Biggest Tech Stocks?" Inside, you'll find out which companies are set to dominate, and we'll give in-the-know investors an edge. To grab a copy of this report, simply click here -- it's free!

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Are we ignoring the fact that Nintendo is still making bank off the 3DS and will continue to do so as long as the quality games keep coming out. One console that breaks even won't be the end of nintendo.

I'm sorry, but...what? No, no, and a thousand times no. Nintendo isn't going to 'go under' just because apple might be thinking of going into gaming.

Considering the fact the Wii U is going to be getting its good games within a year, and already has pikmin 3 which some people consider worth buying the system for. Unless they go under within nine months they're going to come out okay.

Especially with the 3ds on the market. The 3ds not only has one of the best library of games for current gen portables right now, but is about to get one of the most highly anticipated pokemon games in years (which in itself is guaranteed to be a killer app). anyone who actually believes this crap doesn't know much about the video game industry.

The fact of the matter is despite what some people may say Nintendo does indeed put out quality games that are fun to play. The fanbase is big enough that they will last. Besides all that, if that's not enough, I'm pretty sure the sales of the wii and their portable games will let them ride out this generation, if nothing else.

Apple and Nintendo should consider a merger. Nintendo has a library of games that would perform well on the apple store. A merger would resurrect Nintendo and poise to make Apple a dominant leader in the gaming world.

As a gamer, I can assure you that gaming on Apple devices is absolutely no threat to Nintendo, as no real gamers consider those to be "games," in the sense that we understand it. Android and iOS games are geared entirely to the casual non-gamer. I'm a gamer, and I've had these devices for years, but I haven't spent more than a day or two playing with any of their games. Meanwhile, I spend a lot of time on my 3DS, my PSP, and my PC gaming.

I think it's premature to count Nintendo out until the first Zelda game ships for the Wii-U. Then again maybe the Fool knows that, and is trying to convince people to "sell" Nintendo ahead of the Zelda release. Perhaps they plan to make money that way.

I have been a bit worried about Nintendo's future since the release of their more recent hardware offerings.

However, I think what needs to be remembered in all of this is that content has value. There is a very good possibility that the hardware end of Nintendo comes to an end and that would unleash higher profitability for Mario and all of his friends.

If anything Sony is betting on the power of the cloud with the integration of streaming PS4 games remotely via your PS Vita. Microsoft more focused on streaming games with the insistence of digital delivery which they were panned for during the latest E3.

It's fairly normal for new consoles to have a slow start, as the launch titles and price point dictate its success. Now, with the $50 price cut Nintendo is placing on the Wii U this fall, and the new 2DS for $130, Nintendo has a great foothold in the landscape of gaming and is not going anywhere anytime soon.

I just think nintendo has a hard time learning from their past mistakes. The gamecube launch was similar to this one. No Mario or even mario kart = less sales. Technology wise I think the wii u is an interesting system it may be less powerful than an xbox one or ps4 but both of those systems have their flaws as well.

Will microsoft be able to not screw with near perfection they achieved in many ways with the 360? Can Sony develop a user interface that is um... a little more "user" friendly. Will casual gamers actually plunk down 500 or 600 bucks just to play arcade and classic games?

Will the integration of social networking really be the difference maker or will really awesome games still be the center of attention. A lot is being made of power, social networking, and apps. But what about really awesome video games? That don't require you to play with people online for you to have fun playing them?

Also do you really need your game system to do what your computer does, to act as a tv remote, or to watch netflix movies? Aren't there about a hundred different devices that already play netflix movies?

Your tv remote is at your fingertips and well your xbox or ps4 is probably much more powerful than the average persons computer yet they can't seem to get a web browser to work with any type of consistency. I think Nintendo fills the hole in the gaming market nicely they just need to start releasing some games.

Lets get this strait. Nintendo will always be around, maybe the console will go away "which I doubt". But even so they will always be into handhelds or something or other. They are just trying to weather the economic storm the is going on in both of our countries right now. People are still broke and wont buy every console out there like people were doing back in 2008. Also lets get this strait as well. They know, that they have value in the hearts of our generation. Think about. If Nintendo goes yeah we have a new "Chrono Trigger" coming out or even a Super Mario RPG. You will pay $300 bucks to play it. =)

The website's name "Fool" is right. I'll start off with a quote describing Nintendo's financial situation,

"Buried in reams of financial data is the revelation that Nintendo have 812.8 billion Yen (£6.7/$10.5 billion) in the bank - enough for it to take a 20 billion Yen loss (£163/$257 million) every year until 2052. Then there's almost 469 billion Yen (£3.8/$6.0 billion) held in premises, equipment and investments. When that runs out - we're in the year 2075 by this point - they've got some of the most valuable intellectual property in gaming to sell off before the company goes out of business."

Now, let's examine the laughable assumption Apple will be entering the market.

1. Apple is overpriced. Very famous for this. There was a huge backlash on the PS3 being $600, heck there was even problems with the PS4 being $400. There's no way Apple could survive that, even with all the iDrones.

2. What sells systems? The exclusives. If you want developers to devote any time to your system, you have to prove it'll be good and sell well. That requires first party games, in most cases. Apple wouldn't be willing to do that. And the third party games it has could never carry it? Spending the money to buy a machine that can play Angry Birds? Yeah.. no.

3. iOS is a little bit too open. Sure, it's cool you can release anything that comes through, but who remember Mole Kart? Blatant Mario Kart rip-off, there's no way you can say it wasn't. If you have something like that on an actual video game system, you are looking at crazy lawsuits. Not to mention if you want to get even the casual vote, you have to have real games. Assassin's Creed, Call of Duty (can't believe I said that one..), Bioshock. Crap quality indies don't cut it. Good indies like Journey, The Binding of Isaac, VVVVVV could make it, but Cut the Rope and Infinity Blade don't.

And this is just a couple reasons. It's really not hard to bring up more.

All systems will have a place in this world and I doubt Apple will push anyone out in the gaming world. Wii U in my house is great for entertaining the younger kids like my nieces and nephews at family gatherings while the older kids and I wont touch it with a 10 foot pole. PS3 and Xbox my kids and there friends play on one is 16 and the other 18 and even I own 2 of both but there not the format I play on most of the time witch is PC. While no apple product has found it's way in to our house to stay long. Yes I have had them but I hate them and no one here has liked them so I doubt a Apple gaming system will have a place in our home while I know it might in a Mac lovers home.

Comparing the Wii U, which has been out for a year, to the PS4 and Xbox One, which aren't out yet, seems like an unfair comparison.

Granted, all 3 will be out at the same time next year, but people also forget: The first holiday season that the 3 newest consoles were available (Xbox 360, PS3, and Wii) the console that sold the most was... the PS2.

If the 3DS is the best selling console with very high game sales (and that doesn't seem to be changing with the soon to be released Pokemon and Zelda games), then why on Earth do you think that Apple is a threat to Nintendo's business model? Nearly everyone has a smart phone or tablet (or computer / Facebook account) at this point and yet Nintendo's 3DS and 3DS games are flying off the shelves.

And why should we not expect the Wii U sales to improve when they've just announced a price drop, they have several exclusive games coming out between now and 2014 and the holidays are just around the corner? Of course Wii U sales will improve.

There is no gaming company out there with a comparable fortress of exclusive series.

Apple is going to somehow miraculously compete with that list and stand toe-to-toe with Sony and Microsoft already offer?

Bringing up that people play games on their iOS devices means nothing. I play free games on my iPhone and that's it. And the paid games are nowhere near the polish and design standard seen on other handhelds and consoles. Not by a long shot.

Motley Fool has interest in both Microsoft and Apple, which is why their articles are always favorable towards both those companies and why they always hype them up as Nintendo's expense. In fact, some articles here have also claimed why they feel the Xbox One will be either more profitable or a better investment over the PS4. How can we trust anything from the Motley Fools when their purpose is to build up everything Apple and Microsoft and put down the two companies they fear can hurt Microsoft and Apple in Sony & Nintendo.

LOL. Nintendo isn't going anywhere. I love how they just keep focusing on the Wii U and not mentioning that they're doing really well with the 3DS. And plus, the Wii U has games coming. Just because they didn't have 50 amazing games at launch doesn't mean it's a failure.

Now, after reading the articleand some of the comments I will say that we won't know what will happen until it does....Example: I was in banking frfor some years and had work for a few different banks. In a business meeting a statement was made about the sucurity of a certain bank and the person that made the statement confidently said we are not worried about them...After the smoke was cleared some time later we never would have gussed in a million years that Barnett Bank as strong as they were would have folded/ the Point.. You never know! But. the open market for all these companies in Christian Video Games.

When was Nintendo ever even in a coffin? They have vasts amount of money that flows over time from casual sales of their hardware and games keeping themselves afloat. The biggest thing that people don't understand about what separates Nintendo from the rest of the game market is that Nintendo doesn't compete like Sony or Microsoft. They market themselves as a toy, which is the truth. Heck, Nintendo is currently dominating the handheld market and they're only going to gain more once Pokemon X and Y come out. The Wii U will have it's time to truly shine, but much like the 3DS in the first year of release it will simply have to wait it's turn. Then everyone will start complaining that the 3DS doesn't have anymore games and thus Nintendo is "doomed". It's an endless silly cycle for people.

And Apple...frankly your an idiot if you think they would do well in the gaming market. They need actual IP's, not IOS games.

I don't understand how you still have a job??? Your "articles" are always based on lies and what "you feel" the outcome will be. I have yet to see any of your predictions come true. Do you write out of fun? or to make your self look uneducated and out of the technological loop?

The real reason the Wii U was a commercial failure is because it was not advertised properly, so people thought it was a $200 add-on to the original Wii console and not the first contender in the next generation of gaming. Check your facts, writer. This is the real reason. Had this console been advertised and promoted the right way, it would probably be the highest selling home video game console from Nintendo yet.

Really? Really? Apple? Going into the game industry? Ha! That's just comical. Remember their last attempt? The Pippin I believe. It was a pile of horse poop and it failed. And look at the games on the Apple store. All of them are stupid, mundane cow-clickers. They require no thought at all. Apple is destroying the game industry through their crap. And serious? People support it? My god. Where has our world gone. I'm not going to bash on you Apple fanboys out there, but seriously, Apple sucks. It has questionable business practices and you remember that old Big Brother ad that they had? They've become big brother. A while back, there was a game that was based off of the Syrian civil war. Do you know what they did? They effin' said, "Nope, we're not having any of that. Nope, go, nope." For eff's sake Apple, you're enforcing censorship! And you're really dissing the WiiU? The reason why it's not doing well is because of Americans! There's not many good games here because of Americans! Nobody in the US bought all the amazing games on the Wii. And thus, Nintendo doesn't want to invest in America anymore. They know that it'll be a waste of time. I have nothing else to say. Apple you suck, have fun.